Internal audit: a tool for improvement and compliance

Internal audit is a methodology that helps organizations improve their processes, ensure compliance with standards and laws, and identify opportunities for development and improvement. Despite being a key part of quality management, some organizations still see internal audits as an administrative burden rather than an opportunity to come together around the potential to improve. In this article, we explore why internal audits are important, how they can be carried out and what factors can contribute to successful outcomes.

Why conduct an internal audit?

The primary purpose of an internal audit is to provide an objective review of operations to identify both strengths and areas for improvement against the requirements and expectations of the organization. This work is essential to ensure that the organization is constantly evolving and following the processes defined to meet the demands placed on it.

Ensuring compliance with requirements

For many organizations, meeting the requirements of standards such as ISO 9001, ISO 14001 and ISO 45001, as well as regulatory and customer-specific requirements, is crucial. The former obviously applies to those of you who are certified, while the latter two are something that all businesses need to meet to survive and be sustainable. Internal audits help put eyes on the business' processes, review and ensure that the business meets these requirements, which also prepares it for external audits.

Finding gaps

Internal auditing allows for the detection of non-conformities in procedures, policies and processes. It is not just about following rules, but also about identifying areas where procedures are not working as intended, or where they are simply not in line with the level of requirements from, for example, standards or customers. The idea, of course, is to continuously prevent various forms of quality problems and waste and thus improve the overall efficiency of the business.

Identifying opportunities

In addition to identifying deficiencies, it is important to underline the importance of internal audits as an opportunity for the organization to reflect on its working practices and identify opportunities for improvement. This could be to streamline workflows, reduce waste or improve the customer experience.

Having a clear plan for your internal audits, based on the requirements for them combined with where they will have the greatest impact (often associated with risk), can provide your organization with key activities to focus its resources on and continuously improve.

Who can be an internal auditor?

An internal auditor needs the right skills, training and attributes to deliver value. Education is a basic requirement, but equally important are personal qualities such as curiosity and communication skills.

Skills and training

Internal auditors should be or will be, depending on the standards you comply with, documented trained in the relevant standards and in audit methodology. The training provides tools to understand the standards, perform audits and analyze results. Different types of internal audits and quality standards also have 'should' or 'must' requirements regarding competence in the processes to be audited.

Personal qualities

A good internal auditor is:

• Curious and empathetic: the ability to ask open questions and listen actively.

• Analytical: The ability to review documentation and identify patterns or deviations.

• Constructive & communicative: A communicative approach that focuses on pedagogy and improvement rather than pointing out errors.

Creating a dialog that encourages collaboration and improvement is crucial to the success of the internal audit.

How an internal audit works

Internal audits often follow a structured process that can be adapted depending on the size of the organization, industry and specific needs. Having a clear workflow ensures that the audit is thorough, objective and fair, and produces a result that is both useful and practical.

Planning - a strategic starting point

The foundation of a successful internal audit is a clear and carefully designed plan. Defining the purpose of the audit and identifying the areas and processes to be audited ensures that the focus is where it creates the most value for the organization. Is it an overall audit or a targeted audit of specific areas, such as environmental performance, product quality or customer satisfaction?

A robust plan includes:

• Purpose and objectives of the audit.

• Timeframes and resources required for implementation.

• Roles and responsibilities of parties involved, including management and process owners.

With structured planning, the organization avoids critical aspects being overlooked, resulting in more efficient and focused work.

Document review - gaining an understanding of the current situation

To gain a deeper understanding of how the business is supposed to work, governing documents such as policies, procedures and work instructions are reviewed. This lays the foundation for identifying gaps between theory and practice.

For example, a quality management review may reveal that work instructions have not been updated to meet changing customer requirements or legislation. These insights are invaluable in identifying priority areas for improvement and providing a basis for streamlining processes.

Interviews and observations - grounding in reality

After the document review, the next step is to validate how the processes work in practice. Here, it is crucial to create an open dialog with employees through structured interviews and solution-focused conversations.

Observations of workflows complete the picture and reveal potential discrepancies between documentation and actual application. For example, a routine that requires equipment to be checked daily may prove impossible to follow due to lack of resources. By involving employees, the organization not only gains insights but also commitment to change.

Analysis and reporting - a platform for improvement

The information gathered is analyzed and compiled into a report that is more than just a document - it is a tool to drive improvement. A well-crafted report should include

• A clear description of the current state of the business.

• Identified non-conformities and an analysis of their root causes.

• Recommendations for actions to improve the performance and profitability of the business.

A cloud-based management system can play a crucial role here by simplifying analysis and reporting, providing real-time data and creating a transparent overview of prioritized actions. This enables faster decisions and more effective improvement work.

An educational process that drives collective learning

A well-conducted internal audit is an educational process that not only identifies shortcomings but also strengthens the organization's ability to work systematically and long-term. By involving management and process owners, the audit can become a strategic tool that creates value for the entire organization.

When done right - with the right focus, methodology and communication - it becomes a powerful tool for turning insights into concrete improvements, thereby strengthening the organization's competitiveness.

After the internal audit: from report to action

An internal audit is only valuable if the results lead to concrete improvements. That's why it's important to have a clear strategy on how to use the report.

Engage the organization

To ensure that the report does not end up in a drawer, it is important to communicate the results in a clear, educational and engaging way. A combination of written reports and presentations can be effective. Group discussions can also be used to involve employees and create a sense of ownership of the improvement process.

Create action plans

Each identified area for improvement should be linked to a concrete action plan. The plan should include:

• Clearly defined actions.

• Responsible persons or departments.

• Timeframes for implementation.

A well-structured action plan ensures that everyone knows what is expected and when it should be completed.

Follow up and evaluate

Following up on actions is crucial to ensure that they are implemented correctly and have the desired effect. By regularly evaluating progress, the organization can also identify new areas for improvement and adjust its strategies if necessary.

For example, a follow-up may show that an action has solved a specific problem but at the same time created a new challenge, which requires further action.

The role of internal audit in standards

Internal audit is a fundamental part of many management system standards. Its purpose is to ensure that the organization complies with the requirements and guidelines set out in the standards, while creating a culture of continuous improvement.

ISO 9001 (Quality management)

ISO 9001 internal audits focus on reviewing the organization's quality management system. The aim is to ensure that the processes support customer satisfaction and continuous improvement.

ISO 14001 (Environmental management)

Here, audits focus on identifying environmental risks and ensuring that the organization complies with legal requirements and internal environmental objectives. Internal audits are also a tool for driving environmental improvements and reducing the impact of operations.

ISO 45001 (Occupational health and safety)

In occupational health and safety, the role of the audit is to ensure that the organization protects the safety and health of its employees. This includes reviewing risk assessments, accident reports and work procedures.

ISO 27001 (Information security)

ISO 27001 internal audits focus on protecting the organization's information resources. By reviewing security procedures and identifying vulnerabilities, the audit helps minimize the risks of data breaches and information loss.

Summary: Internal audit as a driver for development

Internal audit is more than an administrative control; it is a strategic tool to improve operations and create long-term success. By reviewing processes, identifying deficiencies and highlighting opportunities for improvement, auditing helps to strengthen an organization's efficiency, quality and competitiveness.

The key to a successful internal audit lies in preparation, engagement and follow-up. By involving staff, communicating results clearly and translating insights into action, internal audit can become a positive force for change and development.

Whether it's ensuring compliance with standards, increasing customer satisfaction or improving the working environment, internal audit offers a structured approach to building a stronger and more sustainable organization.